Tango Energy is the fast growing retail arm of Pacific Hydro, a global renewable energy owner, operator and developer, with assets in Chile, Australia, and Brazil.
Tango Energy was established by Pacific Hydro in 2012 to provide retail a distribution channel to support the development of renewable energy projects in Australia. Tango focussed initially on supplying energy to business and commercial customers and is now rapidly expanding its residential customer base in Victoria, with plans to move into other states.
The Tango Energy customer value proposition can be summarised as ‘low cost energy, simple products and excellent customer service’. This simple proposition meets the core needs and wants of consumers, and has underpinned Tango’s rapid growth to reach over 100,000 customers.
Tango Energy believes that renewable energy and good value for money should go hand-in-hand and will extend its customer value proposition to champion this belief, which is shared with Pacific Hydro.
Tango Energy currently employs 92 people across our Geelong and Melbourne offices, servicing residential, SME and commercial and industrial (C&I) customers.
Corporate PPA – MREP 1
In 2017, for the first time in Australia, 14 organisations from different sectors, led by the City of Melbourne, came together to form a consortium and signed a ten-year renewable energy Power Purchase Agreement (PPA) with Pacific Hydro, supplying them with clean, low-cost power.
The 14 participants in this exercise, known as the Melbourne Renewable Energy Project (MREP), are:
- Melbourne City Council
- City of Yarra
- Moreland City Council
- City of Port Phillip
- Australia Post
- Bank Australia
- University of Melbourne
- Zoos Victoria
- Fed Square
MREP was inspired by the group commitment to contribute to group’s renewable energy and emission reduction goals, with the ultimate aim to help avoid the worst effects of climate change. MREP aim was to help increase the speed of Australia’s transition to a renewable energy supplied-grid and play a key role in achieving our zero net emission targets. Furthermore the group wanted to develop a replicable model for other large energy users to cost-effectively reduce emissions and to drive new investment in large-scale renewable energy generation. The original idea for a group renewable energy PPA was sparked in 2014. Coming from various different industries, most of the MREP participants had limited knowledge about PPAs and how they are developed. Because of the unfamiliarity in Australia of this type of agreement, its development within the Australian regulatory framework was also new to many advisors, including legal, procurement, and probity and energy market consultants. Eventually, MREP developed a contract structure that would accommodate different renewable energy purchasing preferences for different customers in the group.
In November 2017, Pacific Hydro and its retail arm Tango Energy were chosen as the preferred suppliers for the PPA. In order to produce the amount of energy required to power the consortium, MREP is supporting the construction of a wind farm at Crowlands, 20km northeast of Ararat in Victoria. The wind farm consists of 39 turbines and has an 80MW capacity.
MREP members have committed to purchase 88GWh per year from the Crowlands Wind Farm as part of the ten-year agreement. The project site was chosen because it has strong, consistent winds and is in close proximity to the electricity grid. One of the key benefits PPAs can offer the industry is investment into new large-scale renewable projects with the security of long-term purchase commitment.
The results of this renewable energy PPA has a number of benefits, including:
- Reducing emissions and delivering on strategic goals in a cost-effective way
- Building a reputation for leadership and innovation
- The opportunity to directly support the local renewable energy industry
- Opportunities for storytelling and creating awareness for customers
- Reduced and stable energy costs
- No repeated internal procurement processes over the duration of the PPA contract
There are potential risks involved when entering a PPA, however, these can be mitigated by several key mechanisms and arrangements in the contract. Being a new concept to the Australian market, the MREP contract and pricing model was previously untested.
Corporate PPA – MREP 2
Following the success of the pioneering MREP project, the City of Melbourne facilitated a power purchase agreement for businesses across the city, as part of the second wave of the Melbourne Renewable Energy Project (MREP 2). The second purchasing group includes 14 shopping centres, nine office buildings, seven educational campuses and four manufacturing facilities.
The buyers group consists of seven participating organisations that committed a contract volume of 110 GWh per annum. The participants include:
- CityWide Asphalt
- Deakin University
- Fulton Hogan
Tango Energy will provide 110 GWh of renewable electricity per year to the purchasing group, spanning 10 years. Commenced in July 2020, the purchased wind power will be produced primarily by the Yaloak South Wind Farm near Ballan, with the remaining energy coming from other wind farm projects in regional Victoria. The MREP 2 deal is equivalent to providing enough renewable energy to power more than 22,000 Australian households a year. It will reduce greenhouse gas pollution by 123,000 tonnes a year, which is comparable to taking nearly 28,000 cars off the road every year.
Where MREP 1 established a new wind farm and saw many local councils and cultural institutions become powered by renewable energy, in facilitating MREP 2, the City of Melbourne is educating and empowering large energy users to understand the role they can play in achieving our goal: for all of Melbourne to be powered by 100 per cent renewable energy. The MREP approach enables cities, corporations and institutions to take an active role in securing renewable electricity supply and acting on climate change. It is also critical to cities such as Melbourne achieving their emissions reduction targets.